The Halifax Convention Centre is finally “paying for itself,” municipal officials told council on Tuesday.
Events East CEO Carrie Cussons presented the Crown corporation’s year-end financial statements to Halifax regional council. Events East’s annual deficit for fiscal 2022-2023, originally budgeted at $7.45 million, was about $1.8 million. That’s an improvement over Events East’s projection in June of $5.54 million.
HRM and the provincial government split that cost, and the municipality’s share for 2022-2023 was about $900,000. The municipality also pays half the financed construction cost of the convention centre, $5.38 million annually in base rent.
Property taxes on the entire Nova Centre, including the hotel and commercial space, go into the municipality’s convention centre reserve account. For the first time, that amount, about $8.5 million annually, was more than the deficit and the base rent combined.
Revenues way up
Cussons said revenues covered operating expenses, and some of Events East’s building costs. Convention centre revenues were $14.55 million against a budget of $7.6 million, up from $2.5 million in 2021-2022.
“I think what a lot of people want to know when they’re reading this is do we have to subsidize it like we did during COVID,” Coun. Shawn Cleary said.
“Can you just confirm that? That that fund from the taxes for the centre pay for the operations this year for Events East?”
Maggie MacDonald, executive director of parks and recreation, confirmed that the property taxes going into the reserve fund exceeded the municipality’s costs on the convention centre.
“So the positive balance of that reserve is indicative of that, yes, it’s paying for itself,” MacDonald said.
That doesn’t account for the public money coming from the provincial government.
As Tim Bousquet has noted, the municipality’s method of paying for the convention centre was “creative:”
The Nova Centre property was considered a special district, with all property tax receipts from the property dedicated entirely to payment of the city’s share of the convention centre rent.
As I’ve pointed out before, this is not how property taxes — especially property taxes on commercial property — are supposed to work. Property taxes collected from every other commercial property in the city go into the city’s general fund and are used to pay for the wide variety of public needs — police and fire services, recreation, roads, and so forth.
Rigging the game so that taxes collected from the Nova Centre go only to the convention centre rent is philosophically dishonest, but it allowed politicians and city managers to claim that the convention centre would pay for itself.
Cleary said on Tuesday, “we can all debate whether or not previous councils decided this was the best way to finance the Nova Center and convention centre.”
“But that’s what they did.”
For 2023-2024, Events East is budgeting for a deficit of $6.5 million with a $3.25 million payment due from HRM. Unlike 2022-2023, that would represent a loss for the municipality.